National Conference on Public Employee Retirement Systems

The Voice for Public Pensions


How Will SECURE 2.0 Impact Public Retirement Plans?

The major retirement bill, commonly known as the SECURE Act 2.0, has been included in the end-of-year omnibus appropriations bill.
How Will SECURE 2.0 Impact Public Pensions?

The SECURE Act 2.0 is expected to clear Congress by the end of the week and be signed into law by President Biden. The text of the SECURE Act 2.0 is found on pp. 2046-2404 of the omnibus bill (PDF).

How will SECURE 2.0 impact public safety employees?

  • Makes the requirement for direct payment by a retirement system under the HELPS healthcare exclusion for retired first responders optional instead of mandatory (beginning p. 2283 of the bill);

  • Excludes from income certain disability payments to retired first responders (p. 2243); 

  • Modifies the exemption from the early withdrawal penalty for first responders from “age 50” to “age 50 or 25 years of service under the plan, whichever is earlier”; and 

  • Extends the exemption from the early withdrawal penalty to include private sector firefighters and certain state and local corrections employees.  


How will SECURE 2.0 impact state and local governmental retirement plans?

  • Increases the age trigger for Required Minimum Distributions from defined benefit and defined contribution plans; in the case of an individual who attains age 72 after December 31, 2022, and age 73 before January 1, 2033, the age trigger is 73; in the case of an individual who attains age 74 after December 31, 2032, the age trigger is 75 (p. 2085 of the text);

  • Increases the annual limits on catch-up contributions to $10,000 for those age 60, 61, 62, and 63 for 457(b), 403(b), and 401(k) plans beginning in 2025 (p. 2087); 

  • Permits employer matching contributions on account of student loan payments for 457(b), 403(b), and 401(k) plans (p. 2089);

  • Provides flexibility for plan fiduciaries when seeking to recoup inadvertent retirement plan overpayments (p. 2213);

  • Eliminates the first day-of-the-month rule for 457(b) plans to provide more flexibility for participants to make changes in elective deferral amounts (p. 2236); and 

  • Requires the Roth method (contributions must be made with after-tax dollars) for catch-up contributions for those who earned more than $145,000 from the employer sponsoring the retirement plan (p. 2368).

To find out how SECURE 2.0 will affect public pensions and to learn more about other federal and state legislation impacting public pensions in 2023, join the public pension community in Washington on January 22-24 at NCPERS 2023 Legislative Conference.


There have been no comments made on this article. Why not be the first and add your own comment using the form below.

Leave a comment

Please complete the form below to submit a comment on this article. A valid email address is required to submit a comment though it will not be displayed on the site.

HTML has been disabled but if you wish to add any hyperlinks or text formatting you can use any of the following codes: [B]bold text[/B], [I]italic text[/I], [U]underlined text[/U], [S]strike through text[/S], [URL][/URL], [URL=http//]your text[/URL]